PKO Bank Polski

Case Study

A combination of the level of complexity, extended infrastructure, wide business needs and most importantly the tight schedule stemming from the planning process ’16 made both the challenges and the business expectation extremely high. However, we knew that we could rely on our team and on our widely experienced partner – Codec.
Anna Oleksów - Team Leader, PKO BP

Company: PKO Bank PolskiIndustry: BankingCountry: PolandEmployees: -

Solution Featured

The Challenge

PKO Bank Polski is one of the biggest financial companies in Poland and one of the leading financial holdings in CEE. PKO BP is the undisputed leader of Polish banking sector in terms of operations, equity capital, assets, number of customers and the distribution network.

The system used at the time didn't meet the fast-growing needs of the organisation. A decision needed to be made: expand the current system being used or implement - based on the previous experience – a new, tailored solution. After analysis it was decided to – due to the cost and time effectiveness – replace the old system with the new one.

Because of the growing need for expanded and more precise management information – which should be generated faster and more intuitively – The bank planned the implementation of the new IT system, extended with an additional analysis module.

The budgeting process required the implementation of both complicated and efficient calculations of the interest income, depreciation costs and reporting positions of the Income and Balance Statement. It was also required to integrate independent cost-calculation modules with income- and interest income modules – all with the ability to handle the high variability of the organizational structure.

Background

PKO Bank Polski is one of the biggest financial companies in Poland and one of the leading financial holdings in CEE. PKO BP is the undisputed leader of Polish banking sector in terms of operations, equity capital, assets, number of customers and the distribution network.

The Solution

Despite the long-term cooperation and knowledge of needs and expectations of the Bank, the project began with a detailed pre-implementation analysis.

The system was placed in modern 64-bit architecture, disposed in three environments: dev, test and production.

"In Codec we treat each project individually, meeting the exact needs of our Clients. We are confident of our competences and tailored solutions, which enables us to build long term and trust-based relations"
Marek Łatuszko - Project Manager, Codec

An important assumption of the implementation process was to create functionalities that make it possible to carry out a full planning process for 2016, so each of the early stages were completed with the launch of the module.

Stage One
The goal of this stage was to prepare the system to carry out the full planning process for 2016. The system consisted of 4 models: projects, costs, central (Bank reporting) and SGKB (holding reporting).

Projects Model -used to implement, calculate and present project costs (direct costs and depreciation) broken down into single projects, aggregated cost items, currencies and units.
Costs Model – used to implement, calculate and present Banks costs (direct costs and cost carrier) broken down to cost items, categories, currencies and BU (including departments of the HQ). The module is provided with a mechanism feed of aggregated data from the Project Model.
Central Model – used to calculate detailed net interest income of the new and the old sales (broken down into products and currencies), commissions, reserves, write-offs and shadow accounting. This model is provided with a mechanism feed of aggregated data from the Project Model. Additionally, final Bank reports are presented in this model (Balance Sheet and Income Statement broken down into divisions and profit-center units).
SGKB Model – used to implement data from the other companies of the holding and to report on a plan and execution for the entire PKO BP holding. It is provided with a mechanism feed of aggregated data of PKO BP from the Central Model. In this Model companies of the PKO BP holding plan their Costs, Balance Sheets and Income Statements.

During Stage One the system was implemented and configured in the new environments, budget models were built (including a data exchange system) and users were set up. There was also training carried out for approx. 150 end users (bank employees) and training for business admins from the Planning and Controlling Department of the new system.

Stage Two
The next step was to expand the system with cost-cascade model. Simultaneously we provided support for the system during the budget session conducted using the models implemented in the previous stage.

Cost-Cascade Model – used for detailed forecasting of quarterly costs for all business units (including retail and corporate units)

In this model users at the central level (disposers and cost controllers) and at the regional level decide on a multi-stage data verification and correction process. During the work at Cost-Cascade Model, the structure of the organisation and the structure of cost accounts become more coherent between Costs, Projects and Cost-Cascade Models.

The system was placed in modern 64-bit architecture, disposed in three environments: dev, test and production.

The Results

Codec implemented the multi-stage budgeting and forecasting process in PKO BP and the entire PKO holding within only 6 months. The system is used by approx. 200 employees. The system improves budgeting, forecasting and monitoring execution of the plan for PKO Bank Polski and PKO holding.
The improvement of these processes mentioned above was possible thanks to:
• betterment of the algorithms in models
• models efficiency optimization through implementation of the new solution
• calculation of the partial results broken down to divisions
• calculation and analysis variety of scenarios for parameters and results
• construction of the Bank budget from various partial scenarios

“Increasing needs of the Bank regarding detailed, multi-dimensional analyisis forced the decision that the bank must implement a new, flexible solution, which would significantly improve efficiency. For conducting this process we’ve chosen Codec, our reliable partner responsible for previous implementations.”Mirosław Grzelak - Head of Planning and Controlling, PKO BP